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Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
Knology, Inc., )
)
Complainant, )
)
v. ) File No. PA 01-006
)
Georgia Power Company, )
)
Respondent. )
MEMORANDUM OPINION AND ORDER
Adopted: November 14, 2003 Released: November
20, 2003
By the Commission:
I. INTRODUCTION
1. In this Order, we grant in part and deny in part a
pole attachment complaint that Knology, Inc.
(``Knology'') filed against Georgia Power Company
(``Georgia Power'') pursuant to section 224 of the
Communications Act of 1934, as amended (``Act'').1 In
particular, we grant Knology's claims that Georgia Power
imposed unjust and unreasonable terms and conditions of
attachment by (1) charging Knology the entire cost of
inspecting Knology's attachments one year or more after
the attachments were installed; (2) failing to allocate
among all attachers certain common costs; (3) assessing
against Knology certain excessive charges; and (4)
failing to provide Knology sufficiently detailed billing
information. We deny the remainder of Knology's claims.
We further order Georgia Power, as more particularly set
forth herein, to refund to Knology certain amounts paid
since June 8, 2001.2 We also direct Georgia Power to
recalculate certain overhead expenses and encourage the
parties to reach agreement on these expenses after the
recalculation. II. BACKGROUND
A. The Parties and the Pole Attachment Agreement
2. Knology is a franchised cable television operator
and certified local exchange carrier providing cable,
interstate and intrastate telecommunications, and
Internet access service in Georgia.3 In particular,
Knology serves the cities of Augusta, Columbus, Evans,
Forest Hills, Grovetown, Martinez, and Midland, Georgia.4
3. Georgia Power is an electric utility that
generates and distributes electricity to over 1.8 million
customers throughout Georgia.5 As such, Georgia Power
owns and controls facilities used to distribute
electricity, including poles that are subject to the
mandatory access provisions of section 224.6 The State
of Georgia has not certified to the Commission that it
regulates the rates, terms, or conditions of pole
attachments.7
4. In February 1998, Knology and Georgia Power
entered into a Georgia Power Company Standard Pole
Attachment Agreement (``Agreement'').8 The Agreement
allows Knology to attach its facilities to Georgia
Power's poles in exchange for the payment of an annual
rental fee.9 With respect to modifications to Georgia
Power poles or other make-ready work necessitated by
Knology's attachments, paragraph 7.2 of the Agreement
requires Knology to reimburse Georgia Power for all
associated costs.10 Similarly, paragraph 3.3 of the
Agreement states that Knology ``shall be responsible for
its individual costs plus its proportionate share of all
joint costs associated with work performed in accordance
with Section 3.2 [Alterations of Poles and Equipment].
[Knology] shall reimburse Georgia Power for any
reasonable costs incurred in performing such work based
upon Georgia Power's standard charges for such
services.''11 The Agreement also requires Knology to
reimburse Georgia Power for its fees and disbursements
relating to ``administrative services not otherwise
required to be performed under this agreement.''12
B. Knology's Attachments to Georgia Power's Poles
5. In 1998, Knology began constructing an independent
network to provide video, telecommunications, and
Internet services in Augusta, Georgia.13 Part of this
network construction involved the attachment of Knology's
cables and equipment to Georgia Power's poles.14
According to Knology, Georgia Power prohibits Knology
from performing its own construction on Georgia Power's
poles.15 Rather, Knology must use two Georgia Power
contractors, Utility Consultants Inc. (``UCI'') and
Utilities Support Systems (``USS'').16 UCI conducts pole
inspections and performs construction prior to the
installation of Knology's attachments, while USS inspects
poles after installation.17 In addition, after USS
performs its post-construction inspection, UCI makes
further engineering recommendations for additional
construction.18
6. Through November 2001, Georgia Power and its
contractors billed Knology in excess of $6 million.19
Knology paid these invoices until approximately May 2001,
when the total charges associated with the project
appeared to Knology to be excessively high.20
Thereafter, Knology paid only a portion of the assessed
charges.21
7. On June 8, 2001, Knology's Director of Make Ready,
Wayne Singleton, wrote to Georgia Power indicating that
he ``recently started a cost and production evaluation of
[Knology's] Augusta project'' and requesting that Georgia
Power provide information (such as field measurements and
notes, construction recommendations, and billing records)
that would assist in his review of make-ready charges
Georgia Power had levied.22 Although Georgia Power
provided Knology some information, Knology considers
Georgia Power's responses to be inadequate.23
Nevertheless, Mr. Singleton conducted an ``audit'' of
Georgia Power's make-ready charges and practices
(``Singleton Audit''), the results of which form the
basis of Knology's Complaint.24
C. The Proceeding Before the Commission
8. Knology filed a Complaint with the Commission on
November 21, 2001. Based upon the Singleton Audit, the
Complaint alleges that Georgia Power: (1) double billed
Knology for certain engineering and construction charges
in the amount of approximately $132,000; (2) overbilled
Knology in the amount of approximately $318,184 for
performing comprehensive pole surveys under the guise of
post-inspection of Knology's attachments; (3) performed
work on the pole network that is not specific to or
otherwise caused by Knology's attachments and charged
Knology in excess of $1.4 million for this work rather
than apportioning the charges among the various attachers
to the poles; (4) imposed unreasonable and excessive
overhead charges notwithstanding the concomitant
application of general surcharges amounting to $600,000;
and (5) refused to itemize, describe, or otherwise
provide clarifying information that would assist Knology
in identifying the basis for Georgia Power's make-ready
charges.25 The Complaint seeks a declaration that
Georgia Power's make-ready practices are unlawful, a
refund of amounts Georgia Power improperly billed Knology
(including amounts Knology paid prior to the filing of
the Complaint), and an order requiring Georgia Power to
modify its practices in the future.26
9. Georgia Power filed a Response to Knology's
Complaint on December 21, 2001. The Response denies each
count of the Complaint, asserting that (1) Knology and
other attachers were responsible for repeated engineering
recommendations and duplicative construction;27 (2) the
pre-construction and post-construction inspections were
part of the make-ready process, and Knology was the sole
beneficiary of the inspections;28 (3) all costs charged
to Knology were reasonable and consistent with Georgia
Power's right to recover the fully allocated cost of
providing pole attachments;29 and (4) Georgia Power
provided all documentation in a timely manner.30 In
addition, the Response contends that the Complaint should
be dismissed, because the Commission lacks jurisdiction,
the case is not ripe for review, and the Complaint is
procedurally defective.31 Finally, the Response asserts
that, under the Commission's rules and the Agreement, any
refund obligation by Georgia Power would be limited to
payments Knology made after the filing of the
Complaint.32
10. Knology submitted a Reply on January 10, 2002,
which takes issue with the jurisdictional, ripeness, and
procedural objections raised in the Response33 and argues
that Georgia Power's defenses to Knology's substantive
claims are without merit.34 In addition, the Reply
reiterates that, in order to avoid an unjust result, the
Commission should order refunds of Knology's pre-
complaint payments for unreasonable make-ready
practices.35
11. On June 6, 2002, with the assistance of Commission
staff, the parties attempted unsuccessfully to resolve
their dispute through mediation. As a byproduct of their
negotiations, however, the parties each moved to
supplement the record in this proceeding with extensive
information relating to the various charges at issue in
the Complaint.36 Georgia Power opposed Knology's Motion
for Leave.37 Despite concerns that one or both parties
were less than diligent in ensuring the completeness of
their initial pleadings, and in the interest of obtaining
a complete record on which to decide the case, Commission
staff granted the parties' motions38 and permitted each
side an opportunity to respond to the other side's
supplement.39
12. Finally, on September 25, 2002, Commission staff
issued a letter to the parties requesting additional
specific information relating to the claims raised in
this proceeding.40 Among other things, Commission staff
asked questions pertaining to pole inspections, pole
change-outs, engineering recommendations, and overhead
charges. Each party filed a voluminous response41 and a
reply.42 After the parties' final submissions in this
case, neither party sought leave to add additional
information that it believed would aid our resolution of
the dispute.
III. DISCUSSION
A. We Reject Georgia Power's Procedural Objections to
Resolution of the Complaint.
13. Georgia Power raises several procedural objections
pertaining to the Commission's authority to resolve
Knology's Complaint. Specifically, the Response argues
that the Commission should dismiss the Complaint, because
(1) the Commission lacks jurisdiction to resolve the
dispute; (2) the dispute is unripe; and (3) the Complaint
does not comply with the Commission's complaint rules.43
Many months later, Georgia Power raised a fourth
procedural objection, namely that the case should be
stayed because of a bankruptcy filing made by Knology's
subsidiary corporation, Knology Broadband, Inc. For the
reasons set forth below, we reject all of Georgia Power's
procedural arguments.
1. The Commission Has Jurisdiction to Resolve
the Complaint.
14. Georgia Power argues that, rather than challenging
the reasonableness of a rate, term, or condition of
access, the Complaint avers simply that Georgia Power
violated the Agreement.44 Consequently, according to
Georgia Power, Knology's exclusive remedy is to seek a
refund of overcharges in a state court contract action.45
In other words, Georgia Power maintains that the
Commission lacks jurisdiction to resolve this dispute.
We disagree. Georgia Power misconstrues the nature of
Knology's Complaint. Knology does not claim merely that
Georgia Power has failed to comply with the terms of the
Agreement. Rather, Knology challenges the reasonableness
of Georgia Power's conduct (e.g., double billing, failing
properly to allocate costs, overcharging for a pole
survey, charging unreasonable overhead expenses),
irrespective of whether that conduct is purportedly
authorized by the Agreement.46 Thus, Knology's Complaint
plainly concerns the reasonableness of rates, terms and
conditions of attachment, which the Commission has
jurisdiction to decide, regardless of the existence of an
agreement between the parties.47 Accordingly, we
reject Georgia Power's jurisdictional challenge.48
2. The Case Is Ripe for Resolution.
15. Georgia Power claims that the Commission should
decline to entertain this case on two ripeness grounds.
First, according to Georgia Power, Knology never engaged
in good faith negotiations prior to filing the Complaint,
because Knology did not present Georgia Power with the
results of the Singleton Audit.49 We believe Knology
satisfied its obligations under the Commission's rules.
16. The pole attachment complaint rules apply ``when
parties are unable to arrive at a negotiated agreement .
. . .''50 Thus, section 1.1404(k) of the rules requires
the complaint to include:
a brief summary of all steps taken to
resolve the problem prior to filing. If
no such steps were taken, the complaint
shall state the reason(s) why it
believed such steps were fruitless.51
In compliance with section 1.1404(k), the Complaint
delineates Knology's efforts to negotiate with Georgia Power
about the challenged make-ready practices.52 These include
correspondence seeking additional information regarding
make-ready work, as well as a meeting with Knology that
Georgia Power does not deny transpired.53 The Complaint's
description of Knology's pre-filing settlement efforts is
sufficiently detailed to assure us that continued
negotiations would have been fruitless. Moreover, contrary
to Georgia Power's assertion,54 the rules contain no
requirement that a complainant present the results of
statistical studies to the other side before filing a
complaint. In any event, the Complaint indicates that the
Singleton Audit was incomplete because Georgia Power refused
to provide additional information Knology requested.55 This
alleged refusal is one of the very factors Knology relies
upon in concluding that additional negotiations would have
availed nothing.56
17. Second, Georgia Power argues that Knology's
allegations are premature, because the parties have not
yet undergone the ``true-up'' process to which they
purportedly agreed.57 Specifically, Georgia Power claims
that it was to bill Knology on a monthly basis for
estimated costs, and, at the conclusion of the make-ready
project, Georgia Power was to reconcile estimated costs
with actual costs.58 Georgia Power then purportedly was
to conduct a financial reckoning: estimated costs
exceeding actual costs would obligate Georgia Power to
pay Knology a refund; actual costs exceeding estimated
costs would entitle Georgia Power to bill Knology the
difference.59
18. Georgia Power has failed to substantiate the
existence of the purported true-up agreement. Although
Georgia Power submits two declarations ostensibly
supporting its position, both declarants state simply
that there was a meeting on March 27, 1998, and that, at
the meeting, Knology agreed to be billed according to an
estimate/true-up system.60 Neither declarant states that
he attended the meeting, however, or even that the
statements made in his declaration are based upon
personal knowledge. Furthermore, Georgia Power proffers
no documentary evidence of the alleged true-up agreement.
We find the absence of a written documentation to be
especially probative given that Georgia Power
memorialized in writing a different oral agreement it
reached with Knology at the very same meeting.61
3. The Complaint Complies with the Commission's
Rules.
19. Georgia Power contends that the Commission should
dismiss the Complaint, because it does not comply with
Commission rule 1.1404(l).62 That rule requires factual
allegations in a complaint to be ``supported by affidavit
of a person or persons with actual knowledge of the
facts, and exhibits . . . [to be] verified by the person
who prepares them.''63
20. We find no such deficiency. With respect to
exhibits, the ``preparer'' of a document is not
synonymous with the ``drafter'' of a document. In his
declaration, Chad S. Wachter, Vice President and General
Counsel of Knology, states that he reviewed the
Complaint's exhibits and is ``familiar with and [has]
actual knowledge of the matters described therein.''64
This is a sufficient attestation that Mr. Wachter was
involved in the exhibits' preparation. Moreover, to the
extent Georgia Power validly objected to the Complaint's
discussion of the Singleton Audit without proper
verification from Patrick Casey, the individual who
conducted the inspections relating to pole change-outs,
Knology remedied that problem by submitting a
supplemental affidavit from Mr. Casey.65
21. Georgia Power also claims that the Complaint fails
to comply with Commission rule 1.363, which governs the
``Introduction of Statistical Data.''66 We decline to
hold Knology to the standard of that rule in this case.
Mr. Singleton, who conducted Knology's ``independent
audit,'' states that he had ``very limited information at
hand,'' because of Georgia Power's unwillingness to
produce field notes.67 According to Mr. Singleton,
Georgia Power's refusal to provide the requested
information prevented him from undertaking as
comprehensive an audit as he would have desired.68 We
decline Georgia Power's request that we reject the
Complaint because the accompanying audit is purportedly
unreliably deficient when Georgia Power is itself largely
responsible for any such deficiencies.
4. Georgia Power's Bankruptcy-Related Arguments
Fail.
22. Georgia Power argues that we should stay this
proceeding in light of a bankruptcy filing by Knology's
subsidiary during the pendency of this proceeding.69
Georgia Power contends that, under the plan of
reorganization filed by Knology's subsidiary, issues
related to the parties' Agreement are to be resolved by
the bankruptcy court or Georgia state court.70 Shortly
after Georgia Power raised this argument, however, the
bankruptcy court issued an order making clear that the
plan of reorganization did not prohibit Knology from
pursuing its claims in this proceeding.71 Accordingly,
we deny Georgia Power's request that we stay this
proceeding.
23. In the same pleading in which it poses its bankruptcy
arguments, Georgia Power raises an additional, new
contention. Georgia Power argues that Knology is not the
proper complainant because the disputed Agreement was
entered into between Knology's subsidiary and Georgia
Power.72 Georgia Power, however, did not raise this
argument in its Response to the Complaint and fails to
explain why it did not include this argument in its
Response. In fact, Georgia Power waited until its final
authorized submission in this proceeding - a submission
to which Knology had no automatic right to respond - to
raise this argument. Accordingly, the argument is
untimely, and we reject it.73
B. Knology's Challenges to Georgia Power's Charges
and Practices are Granted in Part and Denied in
Part.
24. Having concluded that there are no procedural
impediments to resolution of Knology's claims that
Georgia's Power conduct has been unreasonable, we move
now to the specific claims Knology raises. 1. We Grant in Part and Deny in Part Knology's
Double Billing Claim.
25. Knology claims that Georgia Power billed for the
correction of errors caused by its own engineering
contractors during the performance of make-ready work.74
As indicated above, according to Knology, Georgia Power
prohibits Knology from performing its own construction on
Georgia Power's poles, but instead requires the use of
two Georgia Power contractors, UCI and USS, which perform
first (i.e., before make-ready work) and second (i.e.,
after make-ready work) pole inspections, respectively.75
Knology avers that, because USS does not receive UCI's
notes, USS has no way of knowing what recommendations UCI
made and, therefore, cannot tell whether attachments need
to be modified as a result of UCI's recommendations or as
a result of another attacher failing to comply with UCI's
recommendations.76 Knology contends that, as a result of
this system, second-round engineering recommendations
often end up reversing or modifying incorrect first-round
engineering recommendations.77 Moreover, Knology alleges
that Georgia Power billed Knology twice for construction
that was performed only once, as evidenced by the fact
that second-round ``NJUNS'' tickets frequently contain
instructions that are identical to first-round ``NJUNS''
tickets.78
26. We grant this claim to the extent that Knology
paid for duplicative or unnecessary engineering work
after June 8, 2001.79 Utilities are entitled to recover
their costs from attachers for reasonable make-ready work
necessitated by requests for attachment. Utilities are
not entitled to collect money from attachers for
unnecessary, duplicative, or defective make-ready work.
Knology identifies 53 examples of engineering errors or
duplicate charges that it was allegedly unreasonably
forced to pay.80 Georgia Power responds that at least 29
of those 53 examples were the fault of Knology.81 Thus,
Georgia Power appears to concede that at least some of
Knology's engineering error and double billing examples
have merit. We cannot determine from the record,
however, whether Knology paid Georgia Power any amounts
after June 8, 2001 for any of the purported incidents of
engineering error or double-billing. Thus, we order
Georgia Power to refund to Knology amounts Knology paid
after June 8, 2001 for unnecessary or duplicative
engineering work or engineering errors which Knology did
not cause and order Georgia Power to cease and desist
from further unreasonable engineering and billing
practices.
27. Further, we deny this claim to the extent that it
seeks recovery of amounts paid prior to June 8, 2001,
because we do not believe that Knology adequately
preserved its right to refunds for these charges prior to
that point in time.82 Knology claims that it should
receive refunds for amounts paid prior to June 8 because
it could not have detected UCI's errors (1) prior to
``post-inspection'' (when first- and second-round
engineering recommendations could be compared) and, even
then, (2) without the benefit of Georgia Power's field
notes to evaluate the requests.83 As discussed in more
detail at Section III(B)(5), however, the record does not
support Knology's assertions.84
2. Georgia Power Unreasonably Charged
Knology the Entire Cost of Inspecting
Knology's Attachments One Year or More After
the Attachments Were Installed.
28. Knology maintains that Georgia Power (through its
subcontractor, USS) improperly billed Knology for the
full cost of a routine ``pole survey'' (i.e. post-
attachment inspection).85 The post-attachment inspection
purportedly occurred on a rolling (i.e., pole-by-pole)
basis one to two years after Knology's attachments were
installed, which Knology alleges constitutes an
unreasonable delay. Specifically, Knology claims that
the passage of over a year before the performance of a
post-attachment inspection ``allow[ed] too much time and
activity on a pole to occur to offer a meaningful
evaluation of whether additional work related to
Knology's attachments is warranted.''86 Knology does not
challenge the reasonableness of the cost of the
inspection. Rather, it contends that Georgia Power
improperly has deemed the inspection to be related to
Knology's attachments (for which Georgia Power has billed
Knology) instead of a routine inspection (for which
Georgia Power charges all attachers through the carrying
cost component of the annual pole attachment fee).87
According to Knology, under the Agreement and the
Commission's orders, all attachers (not just Knology)
should bear the cost of an inspection that yields
information about more than one cable company's
attachments.88
29. The ``cost of an inspection of pole attachments
should be borne solely by the cable company, if and only
if, cable attachments are the sole ones inspected and
there is nothing in the inspection to benefit the utility
or other attachers to the pole.''89 If an inspection is
``designed to yield information about more than cable
attachments, and thus to benefit other pole users,'' the
cable company should not be required to bear the cost
exclusively.90 In other words, the costs of a pole
inspection unrelated to a particular company's
attachments should be borne by all attachers.
30. As an initial matter, Georgia Power contends that
Knology is challenging only the fact that Georgia Power
billed for the inspection long after it was conducted,
and is not alleging that the inspection actually was
conducted in an untimely manner.91 This is an unfair
reading of Knology's claim.92 In any event, Georgia
Power offers no evidence that the inspection in fact took
place more quickly than Knology contends. To the
contrary, Georgia Power's witness with regard to this
issue, Marcus Mills, admits that ``some [of the post-
attachment inspection] occurred one to two years after
the date make-ready work was completed on the poles.''93
Further, Georgia Power attempts to support its argument
that the pole inspections were conducted in a timely
manner by asserting that its inspectors inspected one
pole every ten minutes.94 This assertion, however, is
not supported by Mr. Mills' declaration. Mr. Mills
merely states that each inspection of a pole is ``usually
very quick,'' and that it is ``possible to inspect a pole
every ten minutes.''95 He does not state that the
inspection in fact took place at that pace. Indeed,
Knology produces evidence indicating that the inspection
actually took much longer than ten minutes per pole.96
Regardless, Georgia Power's response does not address the
issue of how quickly the inspection occurred following
the completion of construction, but just addresses the
speed of inspecting each pole.
31. After challenging Knology's allegations regarding
untimely inspection, Georgia Power quickly turns its
attention to placing blame for the delays. First,
Georgia Power claims that the inspection took a longer
than normal time because the parties agreed to engage one
to two, rather than eight to ten, inspectors.97 Georgia
Power proffers no written evidence of such an agreement,
and the one declarant who testifies in general terms
about the purported agreement does not make his
assertions based on personal knowledge.98 Moreover,
Knology denies that such an agreement exists.99 In light
of this record, we cannot credit Georgia Power's
assertion regarding the number of inspectors.100
32. Next, Georgia Power claims that Knology was
responsible for ``some of the inspection delays,''
because it failed to provide necessary node maps.101
Even assuming this is correct, and Knology takes the
contrary position,102 Georgia Power fails to explain the
remainder of the delays that were not attributable to
Knology.103
33. Finally, Georgia Power admits that at least some
of the post-attachment inspection work benefited entities
other than Knology. Mr. Jackson notes that, during the
post-attachment inspections, the contractor ``identified
third-party safety violations'' and Georgia Power then
``notified the third party and required that third-party
to correct the violation at its own cost.''104 Such an
exercise plainly benefited the attachers who brought
their attachments into compliance with applicable safety
guidelines and benefited the pole owner as well by
eliminating safety violations on the inspected poles.
34. In light of the foregoing, we conclude that the
post-attachment inspection of Knology's attachments
occurred (at least in part) more than one year after
Knology installed its cables and equipment on Georgia
Power's poles.105 We further conclude, based on the
record in this case, that Georgia Power's post-attachment
inspection was not related solely to Knology's
attachments but, instead, constituted a routine
inspection. Specifically, we do not believe that Georgia
Power adequately demonstrated that, notwithstanding the
fact that it took Georgia Power more than a year to
conduct the post-attachment inspection, the inspection
nevertheless related solely to Knology's attachments.106
Indeed, Georgia Power actually concedes, as described
above, that the post-attachment inspection did not, in
fact, solely concern Knology's attachments but also
involved identification and correction of other
attachers' safety violations.107
35. Consequently, we find that charging Knology the
cost of a post-attachment inspection occurring one year
or more after installation of Knology's equipment is an
unreasonable term and condition of attachment. We
further conclude that Knology should not be required to
pay, after June 8, 2001, for post-attachment inspections
that took place more than one year after the attachments
were completed.108 The parties have not advised us which
of the charges that Knology paid after June 8, 2001
related to post attachment inspections occurring less
than one year after attachment. Therefore, we direct the
parties to resolve this issue in accordance with the
guidance provided in this order.
3. Georgia Power Improperly Failed to
Allocate Among All Attachers Certain Common
Costs.
36. Knology claims that Georgia Power failed to
allocate among all attachers various individual and
common costs. In particular, Knology contends that
Georgia Power improperly billed Knology to correct safety
violations caused by other attachers that existed prior
to the commencement of Knology's make-ready work,
including the replacement of poles,109 and charged
Knology the entire cost of a ``from scratch'' pole survey
conducted prior to the commencement of Knology's make-
ready work.110
37. With respect to safety violations caused by other
attachers, Georgia Power makes a three-part argument.
First, Georgia Power maintains that Knology agreed to pay
for pole change-outs regardless of the reason
necessitating the change (i.e., a problem caused by
Knology or a problem caused by another attacher).111
Georgia Power cites no evidence of such an agreement by
Knology. Consequently, we cannot find that an agreement
exists. Absent such an agreement, attained via arms-
length negotiations, it is an unjust and unreasonable
term and condition of attachment, in violation of section
224 of the Act, for a utility pole owner to hold an
attacher responsible for costs arising from the
correction of other attachers' safety violations.112
38. Second, Georgia Power contends that Knology
improperly seeks to avoid the cost of pole replacements
that are necessary to correct safety violations caused
solely by the fact that an additional attachment renders
the pole non-compliant.113 Georgia Power misstates
Knology's position: Knology objects only to pole change-
outs that need to be performed whether or not Knology
attaches to the pole.114 Consequently, Georgia Power's
argument fails.115
39. Third, Georgia Power contends that Knology should
be required to bear the cost of remedying safety
violations on poles that are ``grandfathered'' by the
National Electrical Safety Code (``NESC'').116
Specifically, NESC Section 013.B.2. provides that
``[e]xisting installations, including maintenance
replacements, that currently comply with prior editions
of the Code, need not be modified to comply with these
rules except as may be required for safety reasons by the
administrative authority.''117 Georgia Power contends
that, in ``common industry practice,'' corrections to
grandfathered poles are considered to be ``required by or
necessitated by the new attacher - i.e., Knology.''118
Any cost allocation other than the ``simple'' approach of
requiring Knology to pay for pole corrections, Georgia
Power argues, would require it and other utilities to
conduct an historical inquiry to determine when each
prior attachment was affixed and whether, at that time,
the attachment complied with the NESC.119 We find this
argument to be unavailing. Georgia Power's contentions
are based purely on speculation - i.e., that there is
some, presumably a large, percentage of its poles where
attachments are out of compliance but are nevertheless
protected by the NESC grandfathering provision. The
record is devoid of evidence demonstrating the existence
of such a problem.120
40. Having rejected Georgia Power's defenses regarding
pole change-outs, we order Georgia Power to refund
Knology the costs of any change-outs necessitated by the
safety violations of other attachers for which Knology
paid after June 8, 2001.121 In its Complaint, Knology
calculates that it paid all costs required to replace
over 962 Georgia Power poles, at a cost of $2,146 per
pole, purportedly to make room for Knology's
attachments.122 Of this number, the Singleton Audit
estimates that approximately 30 percent were replaced in
order to correct existing safety violations.123 Georgia
Power takes issue with the manner by which Knology
calculates the percentage of pole change-outs
attributable to other attachers, complaining that Mr.
Singleton (1) improperly attested to a visual inspection
conducted by someone else; and (2) failed to explain what
poles were examined, how those poles were selected, and
how a visual inspection could have been conducted before
the poles were replaced.124 In our view, Knology
adequately has addressed Georgia Power's concerns
regarding the accuracy of its estimate. First, attached
to Knology's Reply is the Affidavit of Patrick Casey.
According to the Casey Affidavit, Mr. Casey and his
employees ``visually inspected each pole for which
Georgia Power issues a change-out order.''125 Moreover,
Mr. Casey's affidavit explains that these pole
inspections were conducted prior to the actual change-out
(i.e., during the two-week period Georgia Power gave
Knology to review and concur with change-out orders).126
Although we can dismiss a complaint that ``does not
contain substantially all the information required under
§ 1.1404'' (including the requirement that factual
allegations be supported by affidavit of a person with
actual knowledge of the facts), we alternatively may
require the complainant to file additional
information.127 Mr. Casey's affidavit is tantamount to
supplemental information.
41. Although Georgia Power attempts (unsuccessfully)
to discredit the Singleton Affidavit, it fails utterly to
provide its own, competing estimate of the percentage of
pole change-outs performed due to a third party's safety
violations. As a result, we accept Knology's 30-percent
figure. Between June 8, 2001 and the filing of the
Complaint, Knology states that it paid invoices relating
to the replacement of 54 Georgia Power poles.128
Multiplying 54 poles by 30 percent results in
approximately 16 poles. Multiplying 16 poles by $2,146
per pole results in $34,336. Consequently, we order
Georgia Power to refund Knology $34,336 for improperly
assessed pole change-out charges.129 In addition,
Georgia Power must refund to Knology any overhead amounts
paid by Knology that were associated with the 16 pole
replacements for third-party safety violations that were
paid by Knology.130
42. Turning now to the issue of the pre-make-ready
inspection costs, we believe that Georgia Power has not
appropriately allocated the cost of that inspection
work.131 While we agree with Georgia Power that it must
ascertain ``where and how Knology should attach in a
manner compliant with safety codes,''132 we are troubled
by Georgia Power's imposition of the entire cost of that
endeavor on Knology. Georgia Power initially claims that
it ``does not have records detailing the identities and
locations of attaching entities and is therefore unable
to provide this information [to Knology].''133 In its
supplemental submission, Georgia Power refines its
objection, arguing that it does not maintain records
detailing ``where each attacher is on each pole to the
inch.''134 Knology does not contend that Georgia Power
should have had in its possession, and provided to
Knology, this type of specific information.135 Rather,
Knology asserts that Georgia Power could have saved
Knology the costs of ascertaining some very basic
information regarding Georgia Power's pole network - such
as the characteristics of the poles themselves or the
identities of other attachers (regardless of the exact
location/condition of attachments) - which undoubtedly
was in Georgia Power's possession.136 Georgia Power
never credibly refutes Knology's claim. Indeed, Georgia
Power states that it requires all attachers ¾ not just
Knology ¾ to identify and locate other attachers on the
pole.137 Assuming that is the case, Georgia Power does
not explain why it has no records at all relating to the
attachments on its poles. If Georgia Power once had the
records but did not keep them, it similarly fails to
offer such an explanation.
43. Further, we reject Georgia Power's assertion that
Knology should pay the entire cost of the pre-make-ready
inspections, because Knology was purportedly the sole
beneficiary of the inspections. Although Georgia Power
claims that it derived no benefit from the pre-attachment
inspections,138 this assertion by counsel finds no
evidentiary support in the record. Moreover, it strains
credulity to say that information regarding the identity
of attachers and the location of attachments that is
gathered in connection with a make-ready project of the
magnitude of Knology's (encompassing some 20,000 poles)
would be of absolutely no value to Georgia Power.
Additionally, Georgia Power acknowledges the likelihood
that other attachers benefited from the pre-make-ready
inspections.139 Thus, we reject Georgia Power's
assertion that Knology is responsible for one-hundred
percent of the pre-attachment inspection costs.
44. Having determined that Knology should not be
responsible for one-hundred percent of the pre-make-ready
inspection costs, we turn now to the question of the
percentage for which Knology should be responsible. The
record offers us a method for determining a reasonable
allocation of the pre-make-ready inspection costs. As
discussed above, Knology argues that 30 percent of the
pole change-outs charged to Knology was due to pre-
existing safety violations caused by other attachers.140
It is reasonable to conclude that pre-existing safety
violations existed on poles that did not require change-
out to the same degree as they existed on poles that did
require change-out. In other words, if 30 percent of the
inspected and replaced poles revealed pre-existing safety
violations caused by other attachers, then one would
reasonably expect that other attachers also caused pre-
existing safety violations on 30 percent of those poles
which did not require replacement.141 Accordingly, we
conclude, based on the discrete record in this
proceeding, that Knology is responsible for 70 percent of
the pre-make-ready inspection costs it paid to UCI after
June 8, 2001.142 Therefore, Knology is entitled to a
refund of 30 percent of the amounts it paid to UCI after
June 8, 2001 ($57,756.28) - or $17,326.88.
4. A Portion of Georgia Power's Make-
Ready Overhead Charges and Surcharges is
Unreasonable.
45. Knology alleges that Georgia Power billed for
unreasonable expenses and overhead charges, including
equipment that is useful not only to Knology's
attachments but to maintenance of Georgia Power poles
generally,143 and an across-the-board overhead surcharge
that purportedly overlaps with individual charges.144
Knology requests a refund of overhead charges and
surcharges that Georgia Power cannot justify.145
46. As a threshold matter, we reject Georgia Power's
argument that overhead costs are subject to a later
adjustment in accordance with a true-up agreement. As
discussed above,146 Georgia Power has failed to
substantiate its claim that there was a true-up
agreement, and accordingly we do not rely on any such
agreement.147 Similarly, Georgia Power's contention that
Knology agreed to pay ``whatever expense was necessary to
facilitate Knology's attachment'' similarly lacks any
record support.148 The letter Georgia Power cites
memorializes Knology's ``verbal request and authorization
for [Georgia Power's] crews working overtime. . . .''149
It does not constitute carte blanche for Georgia Power to
incur any and every expense. We now turn to two
categories of overhead costs - direct overhead costs and
indirect overhead costs. a. Direct Overhead Costs
47. It is undisputed that the parties agreed to
dedicate two full-time Georgia Power employees to the
project at Knology's expense.150 According to Georgia
Power, by entering into the agreement, Knology implicitly
``agreed to pay the employees' salaries, benefits and all
overhead costs, including trucks, radios, and training
classes.''151 In its Reply, Knology does not object to
paying the salaries and benefits of the two employees who
were dedicated to the Augusta Project.152 Accordingly,
we find that Knology is responsible for the two dedicated
employees' salaries and benefits, including (but not
limited to) bonuses, raises, health insurance costs,
workers compensation, and payroll taxes, for the time
period during which they were exclusively assigned to the
Augusta project.
48. We further conclude that Knology is responsible
for paying the entire cost of equipment associated with
the work of ``dedicated'' employees. Knology does not
dispute that it agreed to pay the costs of equipment and
materials utilized by the Georgia Power employees
dedicated to the Augusta project.153 Rather, Knology
contends that, under Commission precedent, equipment that
is useful to the utility generally (i.e., not just on the
Augusta project) should not be billed entirely to
Knology.154 The Order Knology cites, however, was a
rulemaking proceeding that did not address the situation
where parties specifically agreed about how they would
bill costs of equipment utilized by ``dedicated''
employees. Therefore, we find the decision to be
inapplicable.
49. With its Complaint, Knology submitted a
spreadsheet entitled ``Estimated Costs Based on Paid
Invoices,'' which lists, inter alia, amounts Knology paid
that correspond to various journals (i.e., accounts).155
According to Mr. Singleton, Georgia Power refused to
provide Knology with information prior to the filing of
the Complaint regarding the ``definitions of journal
items and the source of the charges,'' which resulted in
an incomplete ``audit.''156 Although Georgia Power
provided some explanation of these accounts during the
course of this proceeding, Knology objects to the fact
that Georgia Power uses Knology's ``good faith and
conservative estimates of the charges and surcharges at
issue.''157 We do not fault Georgia Power entirely. As
the complainant, Knology bears the burden of proof in
this proceeding. Thus, after Knology establishes a prima
facie case regarding specific accounts, Georgia Power
must produce evidence explaining the challenged charges.
Georgia Power, to an extent, did so via the Detwiler
Declaration, which substantiates the various figures
Knology proffers. Thus, there appears to be an agreement
that, with respect to the dedicated employees, Knology
has paid $297,342 for ``direct labor'' costs; $72,281 for
Georgia Power's standard employee performance incentive
compensation plan; $9,408 for a ``salary adjustment'' to
compensate one employee for additional responsibilities;
$27,495 for payroll taxes; and $29,861 for workers
compensation and other benefits (such as healthcare).158
In addition, Knology has paid $95,136.68 for materials
and equipment utilized by the dedicated employees159 and
$2,451 for services provided by third parties in
connection with the work of the dedicated employees.160
As indicated above, we believe these costs appropriately
were billed to Knology.
50. We agree with Knology, however, that Georgia Power
improperly seeks to recover additional amounts beyond
Knology's estimates without adequately meeting its burden
of production regarding the charges. In particular,
Georgia Power claims that, based on a ``revised
spreadsheet,'' Knology owes an additional $190,805.86 for
``GPESS SUPR & ADMIN'' costs, which are costs purportedly
associated with the dedicated employees.161 Georgia
Power, however, offers no explanation or support for this
figure.162 Georgia Power states simply that these are
additional costs attributable to the two dedicated
employees that Georgia Power has incurred but for which
Knology has failed to pay. Georgia Power does not
provide any discernable backup or itemization of this
$190,805.86.163 Without such evidence, we cannot
conclude that such costs are reasonable and will not
require Knology to pay them.164
b. Indirect Overhead Costs
51. In addition to the overhead costs directly
attributable to the dedicated employees, Georgia Power
imposed a charge on Knology for its pro rata share of all
overhead costs incurred by Georgia Power that are not
directly applicable to a specific project, but that
relate to all capital construction projects performed in
the region.165 Examples of these costs are the pay and
expenses of managers, supervisors, financial and
accounting personnel, and other support personnel.166
For simplicity, we refer to these costs as the ``indirect
overhead costs,'' and the fee imposed on Knology as the
``indirect overhead charge.'' Georgia Power explains
that it calculates Knology's pro rata share of these
indirect overhead costs by adding (1) the ratio of the
total regional overhead costs to the total regional
capital construction costs, and (2) a percentage
representing Knology's share of general corporate
overhead expenses.167 Georgia Power calculates that
during the year 2000, the indirect overhead charge
equaled 41.09 percent of the capital construction
costs.168 Although we conclude that Georgia Power may
charge Knology for reasonable indirect overhead costs, we
believe that Georgia Power's application of indirect
overhead expenses in this case is unreasonable.
52. First, because we have concluded that certain of
the direct charges Georgia Power imposed on Knology are
unreasonable, we must also conclude that the associated
overhead charges are unreasonable.169 This is because
the indirect overhead charges are calculated as a
percentage of the direct costs. As Georgia Power
explains, the 41.09% indirect overhead figure is
multiplied against a portion of the direct costs charged
to Knology to derive a dollar amount of indirect overhead
costs charged to Knology.170 Because we have found a
portion of the direct costs to be unreasonable, the
indirect costs are therefore also unreasonable. Thus,
even if we were to conclude that the overhead percentage
developed by Georgia Power in this case were reasonable,
which we do not, Georgia Power would nevertheless have to
recalculate the overhead expenses consistent with the
conclusions rendered elsewhere in this order concerning
the direct costs.
53. Second, Knology persuasively points out that
several of the indirect overhead expenses are comprised
of functions that the two dedicated employees performed
directly for the Knology project and for which Knology
already paid Georgia Power. For example, a large
percentage of the indirect overhead expenses is comprised
of indirect labor expenses, consisting of charges for
Distribution Manager, Distribution Supervision,
Engineering Supervisor, and Operating Associate.171
Georgia Power readily concedes that some of these
indirect labor functions were performed directly by the
dedicated employees assigned to the Knology project.172
Knology contends that, because it agreed to pay a premium
for two Georgia Power ``dedicated management employees''
to ``coordinate and oversee the Knology project,''173 and
these employees performed the management and supervisory
functions captured in the indirect overhead expenses
calculation, then Knology should not be required to pay
for a share of the indirect expenses related to
management and supervisory functions performed by other
Georgia Power employees for other projects.174 Knology
points out that it would have had to pay its share of
these indirect labor expenses if it did not pay for the
two dedicated employees.175 In Knology's view, to
require Knology to pay a share of indirect costs
associated with the functions performed by the dedicated
employees and to pay for the dedicated employees amounts
to an unreasonable duplicative charge.176 We agree.
Accordingly, we require Georgia Power to recalculate the
indirect overhead expenses to account for the fact that
Knology paid for two dedicated employees. Further,
Georgia Power must support its calculation by documenting
the actual overhead costs and the formula used to derive
the new overhead calculation. This calculation, if done
properly, should yield an overhead percentage less than
the 41.09 percent figured initially calculated by Georgia
Power.177
5. Knology Is Entitled to a Refund for
Amounts It Paid After June 8, 2001.
54. Knology acknowledges that, with few exceptions,
the Commission has limited refunds in pole attachment
proceedings to amounts paid after the complaint was
filed.178 Nonetheless, Knology argues that the
Commission has authority to order more expansive remedies
in pole attachment complaint proceedings, and that this
case warrants a refund of payments Knology made
throughout the Augusta make-ready project.179 In
particular, Knology contends that it was unable to
determine whether the make-ready bills were unreasonable
until well after they were paid,180 and that it wished to
pursue settlement discussions with Georgia Power prior to
filing suit.181
55. We decline to award Knology a refund dating back
to the inception of the Augusta make-ready project,
because Knology has not demonstrated that it is entitled
to such relief. Unlike the attacher in Cable Texas - a
decision on which Knology relies heavily - Knology waited
a substantial period of time to contest Georgia Power's
make-ready charges and to attempt to negotiate a
settlement with Georgia Power.182 Specifically, although
the Augusta project started in 1998, it was not until
mid-2001 that Knology requested detailed information
substantiating the charges.183 In light of this delay of
more than two years, Knology's claim that it only
recently could ascertain whether Georgia Power's bills
were unreasonable (because the bills were not
sufficiently itemized and because Knology could not
ascertain what percentage of total project charges the
make-ready bills represented) rings hollow.184
56. As Knology correctly notes,185 the procedures
governing petitions for temporary stays relate to removal
of facilities/termination of service to those facilities,
increase in pole attachment rates, and non-routine
modification of facilities.186 Consequently, a petition
for temporary stay normally is not available to resolve
complaints (such as this one) regarding make-ready
practices. That does not mean, however, that attachers
complaining about make-ready practices are denied an
effective form of relief. The remedy is for attachers
promptly to question practices or charges that they
believe are unreasonable and begin negotiations
concerning those practices or charges. If negotiations
fail or would be fruitless, attachers may promptly seek
relief here at the Commission.
57. Nevertheless, we agree with Knology that we have
broad authority to fashion remedies in pole attachment
complaint proceedings.187 Because Knology began its
discussions with Georgia Power concerning make-ready
costs several months prior to filing its complaint, we
believe it is appropriate to depart from our general rule
that the filing of a complaint marks the beginning of the
refund period.188 In a letter dated June 8, 2001 (the
``June 8 Letter''), Knology first advised Georgia Power
that Knology had ``started a cost and production
evaluation of our Augusta project,'' and requested
detailed back-up information regarding Georgia Power's
bills.189 Georgia Power argues that the June 8 Letter
does not constitute a ``notice of objection or
claim.''190 We agree that the June 8 Letter does not
state expressly that Knology was challenging Georgia
Power's make-ready practices. Nevertheless, we believe
Georgia Power reasonably should have concluded that
Knology objected to the lack of billing information
Georgia Power provided and the necessity of certain make-
ready work given the letter's request for detailed back-
up billing information.191 Consequently, as more
particularly specified elsewhere in this order, we award
Knology a refund for certain amounts it paid after June
8, 2001.192
58. Finally, we deny Georgia Power's request for an
evidentiary hearing.193 Georgia Power cites to a recent
Eleventh Circuit opinion in which the court noted that a
party requesting a hearing in a pole attachment complaint
proceeding must ``identify a material question of fact
that warrants a hearing.''194 Georgia Power has not done
so in this case. Indeed, any information gaps in the
record are the result of the utility's failure to come
forward with sufficient information responsive to
Knology's allegations and the Commission's requests.
Thus, although in appropriate instances an evidentiary
hearing may be warranted, a party to a pole attachment
complaint cannot avail itself of a hearing by refusing to
provide adequate responses to the Commission's factual
inquiries, as Georgia Power has done here. Moreover, in
light of the parties' extensive submissions in this
matter, we believe that the record before us amply
explains their respective positions, and that we are able
to render a decision without such a hearing.
6. Georgia Power's Failure to Provide
Sufficiently-Detailed Billing Information
After Knology Requested It In June 2001 Is An
Unreasonable Practice.
59. Knology contends that Georgia Power's provision of
bills that do not describe the basis for and components
of its make-ready charges impedes Knology's ability to
determine whether the charges are reasonable.195
According to Knology, the failure to provide additional
information, after Knology requested it in June 2001,
constitutes an unreasonable practice under section 224 of
the Act.196
60. Georgia Power essentially concedes that it did not
provide the billing back-up information to Knology when
Knology requested it. Georgia Power, however, defends
its failure to provide the detailed billing information
on the ground that the parties had agreed to a true-up
arrangement, and that Georgia Power accordingly had no
obligation to make detailed information available until a
later time. Georgia Power asserts that Knology
consequently should be required to pay the cost of
compiling the information prior to the true up.197 As
discussed above,198 in our view, Georgia Power has failed
to establish the existence of a true-up agreement.
Accordingly, this defense fails.
61. Georgia Power also claims that requiring it to pay
the cost of compiling the information Knology requests
runs counter to the Agreement.199 Section 16.6 of the
Agreement, however, only requires Knology to pay fees or
disbursements incurred in connection with
``administrative services not otherwise required to be
performed by Georgia Power under this agreement.''200 We
believe that Georgia Power had an obligation to provide a
reasonable amount of information sufficient to
substantiate its make-ready charges and do not view this
as an ``extra'' administrative service for which a
separate charge should apply. In our view, requiring
Knology to pay for the collection and provision of
adequate billing back-up information would impose an
unreasonable cost on Knology's attempt to evaluate the
reasonableness of Georgia Power's underlying charges.
62. We therefore hold that Georgia Power's refusal to
provide the detailed billing information that Knology
requested in June 2001, on the specific grounds Georgia
Power has asserted, was an unreasonable practice under
section 224 of the Act. Georgia Power is directed to
provide reasonable billing back-up information in the
future consistent with the findings in this Order.
IV. ORDERING CLAUSES
63. Accordingly, IT IS ORDERED, pursuant to sections
1, 4(i), 4(j), and 224 of the Communications Act of 1934,
as amended, 47 U.S.C. §§ 151, 154(i), 154(j), 224, and
sections 0.111, 0.311, and 1.1410 of the Commission's
rules, 47 C.F.R. §§ 0.111, 0.311, 1.1410, that the
Complaint filed by Knology, Inc. on November 1, 2001, IS
GRANTED IN PART, to the extent indicated herein, and
otherwise IS DENIED.
64. IT IS FURTHER ORDERED that Georgia Power Company
SHALL REFUND to Knology, Inc, within thirty (30) days of
the release of this Order $51,662.88.
65. IT IS FURTHER ORDERED that this Memorandum Opinion
and Order constitutes a Citation against Georgia Power
Company, pursuant to section 503(b)(5) of the
Communications Act of 1934, as amended, 47 U.S.C. §
503(b)(5), for violations of section 224 of the
Communications Act of 1934, as amended, 47 U.S.C. § 224.
Georgia Power Company may request an interview with
Commission staff at the nearest field office. Subsequent
violations of this type may lead to initiation of a
monetary forfeiture proceeding against Georgia Power
Company.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
_________________________
1 47 U.S.C. § 224.
2 See III(B)(5), infra.
3 Complaint, File No. PA 01-006 (filed Nov. 21,
2001) (``Complaint'') at 1, ¶ 2. Georgia Power describes
Knology as ``one of the leading providers of broadband
communications services, analog and digital cable, local and
long distance telephony and high-speed Internet access to
small and medium sized cities throughout the southeast.''
Response of Georgia Power to Knology's Complaint, File No.
PA 01-006 (filed Dec. 21, 2001) (``Response'') at 1-2.
4 Complaint at 1-2, ¶ 2.
5 Complaint at 2, ¶ 3; Response at 2. In accordance
with 47 C.F.R. § 1.1404(c), the Complaint states that
Georgia Power is not owned by any railroad, any person who
is cooperatively organized, or any person owned by the
Federal Government or any State. Complaint at 2, ¶ 6.
6 Complaint at 2, ¶ 5; Response at 2.
7 Complaint at 2, ¶ 7. See 47 C.F.R. § 1.1404(c)
(requiring pole attachment complaints to represent that the
relevant state has not so certified). See also
http://www.fcc.gov/eb/mdrd/PoleAtt.html (citing States That
Have Certified That They Regulate Pole Attachments, Public
Notice, 7 FCC Rcd 1498 (1992)).
8 Complaint, Exhibit 1. Knology claims that Georgia
Power improperly terminated the Agreement effective
December 31, 2000, and that thereafter Georgia Power deemed
Knology to have accepted its new standard pole attachment
agreement. Complaint at 3-4, ¶¶ 11-12 & Exhibit 2. Georgia
Power explains, however, that the termination letter
attached to the Complaint pertained to a contract between
Georgia Power and Knology of Columbus, a separate Knology
affiliate. Thus, Georgia Power concedes that the 1998
Agreement remains in effect and governs this dispute.
Response at 8 n.41.
9 Complaint, Exhibit 1 (Agreement) at 4, ¶ 7.1.
10 Complaint, Exhibit 1 (Agreement) at 4, ¶ 7.2.
11 Complaint, Exhibit 1 (Agreement) at 3, ¶ 3.3.
12 Complaint, Exhibit 1 (Agreement) at 7, ¶ 16.6.
13 Complaint at 4, ¶ 13.
14 Complaint at 4, ¶ 13.
15 Complaint at 7 n.13.
16 Complaint at 8 n.14. Late in this proceeding,
Georgia Power argued that it was not responsible for amounts
Knology allegedly owes to USS and UCI. Letter to Marlene H.
Dortch, Secretary, FCC, from James A. Stenger, counsel for
Georgia Power, File No. PA 01-006 (Oct. 30, 2002) (``Georgia
Power's Response to Commission's Requests'') at 6; Letter to
Marlene H. Dortch, Secretary, FCC, from James A. Stenger,
counsel for Georgia Power, File No. PA 01-006 (Nov. 20,
2002) (``Georgia Power's Reply to Knology's Response to
Commission's Requests'') at 6-7 & n.4. Georgia Power failed
to raise this issue in its Response, however, and there is
an inadequate record on which to assess the merits of the
argument. Accordingly, we decline to address it. See,
e.g., AT&T Corp. v. Jefferson Telephone Co., Memorandum
Opinion and Order, 16 FCC Rcd 16130, 16133 n.18 (2001);
Consumer.Net v. AT&T Corp., Order, 15 FCC Rcd 281, 300, ¶ 40
n.93 (1999) (declining to consider an argument raised for
the first time in the briefs). Cf Building Owners and
Managers Association International v. FCC, 254 F.3d 89, 100
n.14 (D.C. Cir. 2001) (declining to address an issue raised
cursorily in the brief).
17 Complaint at 8 n.14.
18 See Complaint, Affidavit of Wayne Singleton
(``Singleton Affidavit'') at 8, ¶ 15.
19 Complaint at 4, ¶ 14.
20 Complaint at 4, ¶ 16.
21 See generally Response of Knology, Inc. to the
Commission's Request for Additional Information, File No. PA
01-006 (filed Oct. 30, 2002) (``Knology's Response to
Commission's Requests'') (explaining that Knology paid,
after June 8, 2001, certain amounts that were invoiced
before June 8).
22 Complaint, Singleton Affidavit at Exhibit 1
(Letter dated June 8, 2001 to Mark Mills, Georgia Power,
from Wayne Singleton, Director of Make Ready, Knology) at 1.
23 Complaint at 4-5, ¶¶ 19-22.
24 Complaint at 6, ¶ 23.
25 Complaint at 6-7, ¶ 24.
26 Complaint at 32-35, ¶ 72.
27 Response at 14-18.
28 Response at 18-23.
29 Response at 23-25.
30 Response at 26.
31 Response at 6-14.
32 Response at 27-32.
33 Reply, File No. PA 01-006 (filed Jan. 10, 2002)
(``Reply'') at 5-17.
34 Reply at 17-30.
35 Reply at 30-34.
36 Motion for Leave to File Supplemental Information,
File No. PA 01-006 (filed June 24, 2002) (``Knology's Motion
for Leave''); Motion of Georgia Power Company for Leave to
File Supplemental Information, File No. PA 01-006 (filed
June 24, 2002) (``Georgia Power's Motion for Leave''). See
Supplemental Information, File No. PA 01-006 (filed June 24,
2002) (``Georgia Power's Supplemental Information'').
37 Opposition of Georgia Power Company to Knology
Motion for Leave to File Supplemental Information, File No.
PA 01-006 (filed July 1, 2002) (``Georgia Power's Opposition
to Knology's Motion for Leave'').
38 See Letter to Stephen R. Bell and Gunnar D.
Halley, counsel for Knology, and Robert P. Williams, II,
Charles A. Zdebski, Todd M. Stein, and Jennifer A. Kerkhoff,
counsel for Georgia Power, from Lisa B. Griffin, Deputy
Chief, Market Disputes Resolution Division, Enforcement
Bureau, FCC, File No. PA 01-006 (July 2, 2002) at 2.
39 See Georgia Power's Opposition to Knology's Motion
for Leave at 2-10; Reply of Knology, Inc. to the
Supplemental Information Filed by Georgia Power Company,
File No. PA 01-006 (filed July 15, 2002) (``Knology's Reply
to Georgia Power's Supplemental Information'').
40 Letter to Stephen R. Bell and Gunnar D. Halley,
counsel for Knology, and Robert P. Williams, II, Charles A.
Zdebski, Todd M. Stein and Jennifer A. Kerkhoff, counsel for
Georgia Power, from Lisa B. Griffin, Deputy Chief, Market
Disputes Resolution Division, Enforcement Bureau, FCC, File
No. PA-01-006 (Sept. 25, 2002) (``Commission's Requests'').
41 See Knology's Response to Commission's Requests;
Georgia Power's Response to Commission's Requests.
42 Reply of Knology, Inc. to Georgia Power Company's
Response to the Commission's Request for Additional
Information, File No. PA 01-006 (filed Nov. 21, 2002)
(``Knology's Reply to Georgia Power's Response to
Commission's Requests''); Georgia Power's Reply to Knology's
Response to Commission's Requests. See also Limited
Response of Knology, Inc. to Georgia Power Company's
November 20, 2002 Reply, File No. PA-01-006 (filed Mar. 12,
2003) (addressing principally a bankruptcy issue Georgia
Power raised for the first time in its November 20, 2002
filing); Reply of Georgia Power Company to Limited Response
of Knology, Inc. to Georgia Power Company's November 20,
2002 Reply, File No. PA 01-006 (filed Mar. 19, 2003);
Knology's Motion for Leave to File Bankruptcy Court Order,
File No. PA 01-006 (filed Apr. 1, 2003); Response of Georgia
Power to Knology, Inc.'s Motion for Leave to File Bankruptcy
Order, File No. PA 01-006 (filed Apr. 8, 2003) (not opposing
motion for leave to file order).
43 Response at 6-14.
44 Response at 7.
45 Response at 7.
46 See generally Complaint at 31-33, ¶ 71.
47 Mile Hi Cable Partners v. Public Serv. Co. of
Colo., Order, 17 FCC Rcd 6268, 6271 (2002) (rejecting a
utility's argument that the state court had exclusive
jurisdiction to resolve disputes concerning the rates, terms
and condition of attachment contained in an agreement and
affirming the Commission's exercise of jurisdiction, relying
on section 224(b)(1) of the Act (providing the Commission
with authority to regulate the rates, terms and conditions
of attachment, 47 U.S.C. § 224(b)(1))), review denied sub
nom. Public Serv. Co. of Colo. v. FCC, 328 F.3d 675 (D.C.
Cir. 2003); Alabama Cable Telecommunications Ass'n v.
Alabama Power Co., Order, 16 FCCR 12209, 12217, ¶ 18 (2001)
(``Alabama Power''), review denied sub nom. Alabama Power
Co. v. FCC, 311 F.3d 1357 (11th Cir. 2002); Texas Cable &
Telecommunications Ass'n v. Entergy Servs., Order, 14 FCC
Rcd 9138, 9142, ¶ 12 (Cable Serv. Bur. 1999) (``Texas
Cable''). See also Southern Co. Serv., Inc. v. FCC, 313
F.3d 574, 583-84 (D.C. Cir. 2002) (``Southern Company'')
(affirming conclusion that attaching entities may sign a
pole attachment agreement and later file a complaint with
the FCC challenging an allegedly unfair element of the
agreement).
48 Georgia Power's reliance on two Bureau-level
orders in support of its jurisdictional argument is
misplaced. Response at 6-7. These orders did not hold that
the Commission lacks jurisdiction to decide claims
concerning alleged unjust or unreasonable rates, terms or
conditions of attachment. See Cable Texas, Inc. v. Entergy
Servs., Inc., Order, 14 FCC Rcd 6647 (Cable Serv. Bur. 1999)
(``Cable Texas''); Marcus Cable Associates, L.P. v. Texas
Util. Elec. Co., Declaratory Ruling and Order, 12 FCC Rcd
10362 (Cable Serv. Bur. 1997) (``Marcus Cable'').
49 Response at 9-10.
50 Amendment of Commission's Rules and Policies
Governing Pole Attachments, Consolidated Partial Order on
Reconsideration, 16 FCC Rcd 12103, 12111, ¶ 10 (2001)
(``Consolidated Order''), review denied sub nom. Southern
Company, 313 F.3d at 574. See 47 U.S.C. § 224(k) (the
Commission's regulations apply ``when the parties fail to
resolve a dispute over such charges'').
51 47 C.F.R. § 1.1404(k).
52 Complaint at 5-6, ¶¶ 18-22; at 7, ¶ 25.
53 Complaint at 5-6, ¶¶ 18-22; Response at 10 n.49.
54 Response at 10.
55 Complaint at 6, ¶¶ 22-23.
56 Complaint at 7, ¶ 25.
57 Response at 11.
58 Response at 11.
59 Response at 12. During mediation, Georgia Power
indicated that it recently had completed the true-up
process, and it subsequently filed the results of that
process as part of its supplemental submission. See Georgia
Power's Supplemental Information, Declaration of Greg
Detwiler (``Detwiler Declaration''), Exhibit 3. According
to Georgia Power, as of May 1, 2002, Knology owes an
additional $882,748.17 (plus interest) for work performed
and actual costs incurred on the Augusta project.
Supplemental Information, Detwiler Declaration at 3-4, ¶ 6.
60 See Response, Exhibit 1 (Declaration of Marcus
Mills (``Mills Declaration'')) at 12, ¶ 29; Response,
Exhibit 2 (Declaration of Thomas Jackson (``Jackson
Declaration'')) at 9, ¶ 20; at 10, ¶ 22.
61 See Reply, Exhibit 2 (Letter dated May 11, 1998 to
Bret McCants, Knology, from J. Darryll Wilson, Georgia
Power) (memorializing Knology's authorization of the
addition of a project manager and a senior inspector to the
project).
62 Response at 12-13.
63 47 C.F.R. § 1.1404(l).
64 Complaint, Affidavit and Verification of Chad S.
Wachter (``Wachter Affidavit'') at 5, ¶ 10.
65 See Reply, Affidavit of Patrick Casey (``Casey
Affidavit'') at 2, ¶ 5.
66 Response at 13-14; 47 C.F.R. § 1.363. See
Adoption of Rules for the Regulation of Cable Television
Pole Attachments, Memorandum Opinion and Order, 45 Rad. Reg.
2d (P&F) 1005, ¶ 21 & n.24 (1979) (allowing for application
of Rule 1.363 in pole attachment proceedings).
67 Complaint, Singleton Affidavit at 11, ¶ 22.
68 Complaint, Singleton Affidavit at 19, ¶ 37.
69 Georgia Power's Reply to Knology's Response to
Commission's Requests at 2-3.
70 Georgia Power's Reply to Knology's Response to
Commission's Requests at 2-3.
71 See Motion for Leave to File Bankruptcy Court
Order at Exhibit A (bankruptcy court order concluding, at
page 2, that ``the provisions of the plan [of
reorganization] do not preclude Knology or Broadband from
the continued prosecution of the complaint filed on November
21, 2001 and currently pending before the Federal
Communications Commission . . . .'').
72 Georgia Power's Reply to Knology's Response to
Commission's Requests at 2-3.
73 See supra at note 16 (discussing orders in which
we have declined to consider arguments raised for the first
time in briefs filed late in a proceeding).
74 Complaint at 7, ¶ 26.
75 Complaint at 8 n.14.
76 Complaint at 8 n.14.
77 Complaint at 9, ¶ 28.
78 Complaint at 9, ¶ 29. NJUNS stands for National
Joint Use Notification System. Complaint at 9, ¶ 28.
79 As explained infra at section III(B)(5), Knology
has not established an entitlement to refunds for amounts
paid before June 8, 2001 for alleged unreasonable conduct.
80 Complaint, Exhibit 5.
81 Response, Jackson Declaration at 14, ¶ 32 and
Exhibit A.
82 See infra at section III(B)(5). Section 1.1410(c)
specifies that refunds will ``normally'' be calculated
``from the date that the complaint, as acceptable, was filed
. . . .'' 47 C.F.R. § 1.1410(c).
83 Reply at 18.
84 See infra at section III(B)(5). See generally
Complaint, Singleton Affidavit at 7-8, ¶ 12 (discussing
opportunities for Knology to identify and raise make-ready
concerns, including regular opportunities to review and
comment on initial engineering recommendations); Reply,
Reply Affidavit of Jeffery L. Barnett (``Barnett Reply
Affidavit'') at 3, ¶ 6 (explaining that many of the errors
or duplications about which Knology complains were the
result of lack of initial measurements or vague make-ready
recommendations (which we believe could have been detected
at an early stage)). Notwithstanding Knology's
contemporaneous opportunities to challenge engineering
recommendations and seek additional information concerning
make-ready practices, Knology did not raise questions or ask
for additional information concerning make-ready charges
until June 8, 2001. As explained infra at section
III(B)(5), this failure by Knology, when considered with the
general rule that entitlement to refunds begins the date the
complaint is filed, leads us to conclude that Knology is not
entitled to refunds beyond June 8, 2001.
85 Complaint at 12, ¶ 34. Georgia Power contends
there is no such thing as a ``general pole survey.''
Georgia Power's Response to Commission's Requests at 8.
Although Knology uses the word ``survey,'' we believe the
phrase post-attachment ``inspection'' more accurately
reflects the activity at issue in this part of our Order.
86 Complaint at 11, ¶ 34.
87 Complaint at 11-12, ¶ 34.
88 Complaint at 12-13, ¶¶ 35-36.
89 Cable Texas, 14 FCC Rcd at 6652, ¶ 13 (citing
Newport News Cablevision, Ltd. v. Virginia Power, Order, 7
FCC Rcd 2610, 2614, ¶ 9 (Com. Car. Bur. 1992)).
90 First Commonwealth Communications v. Virginia
Elec. & Power Co., Order, 7 FCC Rcd 2614, 2615, ¶ 8 (Com.
Car. Bur. 1992).
91 Response at 20.
92 See Complaint at 11, ¶ 34 (``[T]his pole survey
typically occurred one to two years after the Knology
attachments were installed.'') (emphasis added).
93 Response, Mills Declaration at 10, ¶ 23. Mr.
Mills further describes this as a ``one to two year delay.''
Id.
94 Response at 19.
95 Response, Mills Declaration at 9, ¶ 22 (emphasis
added).
96 See Reply, Reply Affidavit of Brett McCants
(``McCants Reply Affidavit'') at 4, ¶ 10 (``The shortest
average duration of inspection time that I found was just
over 32 minutes per pole . . . .'').
97 Response, Mills Declaration at 9, ¶ 22.
98 Response, Mills Declaration at 9, ¶ 22.
99 Reply, Casey Affidavit at 5, ¶ 14; Reply, Reply
Affidavit of Wayne Singleton (``Singleton Reply Affidavit'')
at 2, ¶ 5; Reply, McCants Reply Affidavit at 2, ¶ 4; Reply,
Reply Affidavit and Verification of Chad S. Wachter
(``Wachter Reply Affidavit'') at 1, ¶ 3.
100 Cf. Echostar Communications Corp. v. FCC, 292 F.3d
749, 753 (D.C. Cir. 2002) (Commission appropriately could
rely on unconstested, sworn affidavit of witness with
personal knowledge).
101 Response at 20 (emphasis added).
102 Reply at 21.
103 Georgia Power claims that Knology suffered no
damage as a result of any delay, because no other attachers
attached to the poles between the time that Knology attached
to the poles and Georgia Power inspected the poles.
Response at 19-20. Testimony from Georgia Power's own
declarant contradicts this unequivocal assertion. See
Response, Mills Declaration at 10-11, ¶ 24 (``However, in
this case, except on one road in the Knology Project, there
were no attachers after Knology.'') (emphasis added). In
any event, Georgia Power's argument is irrelevant. If (as
we conclude) the inspection was not specific to Knology's
attachments, then Knology cannot be held responsible for the
total cost, regardless of whether other attachers installed
their cables and equipment on Georgia Power's poles after
Knology.
104 Response, Jackson Declaration at 12, ¶ 28.
105 See, e.g., supra at Paragraph 30 and n.93.
106 Georgia Power argues that a year-long delay prior
to the post-attachment inspection ``allows for final line
sag and pole settling to occur at least one full cycle of
seasons.'' Response at 19 n.87; Id., Declaration of Michael
E. Davis (``Davis Declaration'') at 3, ¶ 8. This statement,
however, is not supported by evidence of industry-wide
practices, or proof that Georgia Power applies this standard
to all attachers on its poles.
107 Response, Jackson Declaration at 12, ¶ 28.
108 See section III(B)(5) infra (finding that Knology
is entitled to a refund for amounts it paid after June 8,
2001).
109 Complaint at 15-16, ¶ 40.
110 Complaint at 14, ¶ 37.
111 Response at 21-22.
112 See Kansas City Cable Partners v. Kansas City
Power & Light Co., Consolidated Order, 14 FCC Rcd 11599,
11606-07, ¶ 19 (Cable Serv. Bur. 1999) (``Correction of the
pre-existing code violation is reasonably the responsibility
of KCPL and only additional expenses incurred to accommodate
Time Warner's attachment to keep the pole within NESC
standards should be borne by Time Warner.'').
113 Georgia Power's Response to Commission's Requests
at 4-5.
114 Knology's Reply to Georgia Power's Response to
Commission's Requests at 10 & n.30.
115 Georgia Power argues that, should the Commission
award a refund relating to pole replacements, it should
favor the ``incremental cost allocation'' (i.e., requiring
the existing attacher to pay the cost of rearranging its
attachments on a pole if Knology were not an attaching
entity) that Georgia Power proposes, rather than the
``proportional cost allocation'' (i.e., requiring each
attacher to pay its pro rata share of replacement costs)
that Knology proposes. Georgia Power's Response to
Commission's Requests at 4-5. Again, Georgia Power
misapprehends Knology's argument, which is that it should
not be forced to bear the entire cost of pole change-outs
that are required ``only when a pre-existing safety
violation could not have been corrected without a pole
replacement.'' Knology's Response to Commission's Requests
at 10. In any event, we have determined a reasonable
allocation based on information in the record. See infra
paragraphs 40-41.
116 Georgia Power's Response to Commission's Requests
at 4.
117 National Electrical Safety Code C2-2002 Section
013.B.2.
118 Georgia Power's Response to Commission's Requests
at 4.
119 Georgia Power's Response to Commission's Requests
at 4.
120 Moreover, Knology argues persuasively that there
have been no material changes to the NESC in the last ten
years and that Georgia Power, accordingly, would have
detected any grandfathered poles during the safety
inspection it conducts on a ten-year basis. Knology's Reply
to Georgia Power's Response to Commission's Request at 8.
Consequently, even if Georgia Power is correct about the
existence of grandfathered poles, the cost of identifying
them would not be as great as Georgia Power posits.
121 Knology alleges that, ``[w]ith respect to non-
change-out work,'' Georgia Power has a ``policy not to
allocate costs among attachers.'' Complaint at 16, ¶ 41.
Knology asks the Commission to declare that such a practice
is unfounded and to order Georgia Power, on a prospective
basis, to bill other attachers proportionately for their
share of the costs of curing violations. Complaint at 32, ¶
72. Georgia Power, however, denies that it engages in this
practice, and the record does not contain anything beyond
the Complaint's assertion to suggest the contrary. See
Response, Jackson Declaration at 11, ¶ 24 (``each existing
attacher has been required to correct its own safety
violations and perform its own make-ready work'' and Georgia
Power ``has not invoiced Knology for any such work'') and ¶
28 (Georgia Power ``identified third-party safety
violations'' and ``notified the third-party and required
that third-party to correct the violation at its own
cost.'').
122 Complaint at 15, ¶ 40. Georgia Power does not
dispute this figure. See Response, Jackson Declaration at
7, ¶ 15 (``Replacing a typical pole costs approximately
$2,000.'').
123 Complaint at 16, ¶ 40.
124 Response at 22.
125 Casey Affidavit at 2, ¶ 4.
126 Casey Affidavit at 2, ¶ 4.
127 47 C.F.R. § 1.1406(b).
128 Knology's Response to Commission's Requests at 10.
Georgia Power appears not to dispute this figure. See
Georgia Power's Reply to Knology's Response to Commission's
Requests at 15-17.
129 Finally, Georgia Power ``renews'' a request -
first made after the conclusion of the initial pleading
cycle during mediation of this proceeding - that ``any other
attachers whom [the Commission] believes owe Knology
reimbursement for make ready costs be added as necessary
parties to this proceeding.'' Georgia Power's Response to
Commission's Requests at 5. We deny this request, because,
in addition to being untimely made, we do not believe, given
the record, that the addition of parties is necessary.
130 The record does not contain the information
necessary to calculate this amount, or even to determine
whether an overhead component was charged Georgia Power for
this work. We encourage the parties to resolve this issue
privately.
131 Again, we opt to use the word ``inspection,''
rather than ``survey,'' because the former word, in our
view, more accurately describes the activity at issue.
132 Response at 20.
133 Response at 21.
134 Georgia Power's Response to Commission's Requests
at 8.
135 Knology's Reply to Georgia Power's Response to
Commission's Requests at 15 (``Knology does not dispute that
field inspection and engineering must occur nor does it
quarrel with the need for pole measurements.'').
136 Knology's Reply to Georgia Power's Response to
Commission's Requests at 16-17.
137 Response at 21.
138 Georgia Power's Reply to Knology's Response to
Commission's Requests at 12-13. See also Georgia Power's
Supplemental Information, Detwiler Declaration at 4, ¶ 8.
139 See Georgia Power's Reply to Knology's Response to
Commission's Requests at 13 (acknowledging that ``some pre-
existing safety violations may be remedied by the make ready
process'' but disputing that this benefit is more than minor
or incidental).
140 Casey Affidavit at 3, ¶ 8.
141 Although we might have reached a different
conclusion or calculation based on a different record, the
record here does not offer a persuasive, reasonable
alternative. Although Georgia Power argues that the make-
ready process identified only minor or incidental pre-
existing safety violations caused by other attachers, it
fails to quantify the percentage of these pre-existing
violations. See Georgia Power's Reply to Knology's
Response to Commission's Requests at 13. Thus, in the
absence of evidence demonstrating that the approach we take
here is unreasonable, or that a different analysis is more
appropriate, we adopt the approach described herein. See
Georgia Power v. FCC, 346 F.3d 1033, 1042 (11th Cir. 2003)
(upholding the Commission's reasonable exercise of its
judgment in adopting a pole attachment rate element when the
parties did a poor job developing a record on the issue).
142 Knology argues that it should be responsible for
only one-fourth of the pre-make-ready inspection costs on
the theory that the costs should be spread evenly among all
attachers and there is an average of four attachers on
Georgia Power's poles. Complaint at 12, ¶ 34 & Exhibit 7.
Knology fails, however, adequately to (1) support its
contention that pre-make-ready costs should be allocated
evenly among all attachers; (2) explain how this allocation
is consistent with its proposed allocation of pole
replacement costs; and (3) support its proposed average
number of attachers.
143 Complaint at 19, ¶ 47.
144 Complaint at 20, ¶ 48.
145 Complaint at 20, ¶ 49. Knology concedes that
Georgia Power is permitted to recover a reasonable overhead
charge. See Knology's Response to Commission's Requests at
10.
146 See Section III(A)(2), supra.
147 Georgia Power asserts that Knology is responsible
for $72,596.55 in additional expenses. Georgia Power's
Response to Commission's Requests at 12. Apparently, these
are charges that have not been billed to Knology, but came
to light during the purported ``true-up.'' Remarkably,
Georgia Power refuses or otherwise fails to categorize or
identify these charges, even as it argues that Knology is
responsible for all ``actual costs.'' In any event,
because Georgia Power has failed to establish that a true-up
agreement exists, we disallow these charges to the extent
that they are not already disallowed elsewhere in this
Order.
148 Response at 23.
149 Response, Mills Declaration, Exhibit A (Letter
dated February 10, 1999 from Marc A. Mills, Georgia Power,
to Robert R. Bailey, Regional Construction Director,
Knology).
150 Response at 2-3; Response, Jackson Declaration at
3-4, ¶ 6; Response, Mills Declaration at 3-4, ¶¶ 5-6; Reply
at 12-13; Reply, Exhibit 2.
151 Response at 2-3; Response, Jackson Declaration at
3-4, ¶ 6.
152 See Reply at 27-29.
153 See Reply at 28-29.
154 Reply at 29 (citing Adoption of Rules for the
Regulation of Cable Television Pole Attachments, Memorandum
Opinion and Order, 77 F.C.C.2d 187, 197, ¶ 29 (1980)).
155 See Complaint, Exhibit 5.
156 Complaint, Singleton Affidavit at 5-6.
157 Knology Response to Georgia Power's Supplemental
Information at 8.
158 Complaint, Exhibit 5; Georgia Power's Supplemental
Information, Detwiler Declaration at 6-8, ¶¶ 13-23.
159 We arrive at this figure by adding $2,584 for
materials and supplies (Georgia Power's Supplemental
Information, Detwiler Declaration at 6-7, ¶ 15) and
$92,552.68 for radio usage, computer and telecommunications
costs (Georgia Power's Response to Commission's Requests at
13, ¶ 8).
160 This amount is described in the Detwiler
Declaration as ``Accounts Payable.'' Georgia Power's
Supplemental Information, Detwiler Declaration at 7, ¶16.
Although Knology initially challenged the reasonableness of
these charges, which included cell phone charges and
occasional meals, Georgia Power explained the nature of this
category of charges in its Response, see Mills Declaration
at 16, ¶ 39, and Knology did not subsequently dispute the
explanation provided by Georgia Power. Thus, we conclude
that this category of expenses, at least on this record, is
reasonably included as an appropriate direct overhead
charge.
161 Georgia Power's Supplemental Information, Detwiler
Declaration at 8-9, ¶ 24.
162 Georgia Power's Supplemental Information, Detwiler
Declaration at 8-9, ¶ 24 & Exhibit 2 (Revised Spreadsheet
simply listing GPESS SUPR. & ADMIN. figure of $819,001.50 of
which Knology purportedly has paid $628,195.64).
163 Georgia Power refers to its general ledger but
that document is virtually indecipherable and Georgia Power
provides no analysis for how the $190,805.86 is derived from
the ledger.
164 We reiterate here that Knology, like other
attachers, bears the burden of proving that charges are
unreasonable in this proceeding. Once Knology establishes
that charges are not reasonably supported or itemized,
however, the burden of production shifts to Georgia Power to
justify the inadequately supported charges. This shifting
of the burden of production is particularly appropriate in
cases such as this, where the utility has unique access to
information and records concerning its charges. See
National Communications Assoc., Inc. v. AT&T Corp., 238 F.3d
124, 130 (2d Cir. 2001) (explaining that it is appropriate
to shift the burden of production to the party with easier
access to relevant information).
165 Georgia Power's Supplemental Information, Detwiler
Declaration at 10-11, ¶¶ 27-30.
166 Georgia Power's Supplemental Information, Detwiler
Declaration at 10, ¶ 27.
167 Georgia Power's Supplemental Information, Detwiler
Declaration at 10-11, ¶¶ 27-30.
168 Georgia Power's Supplemental Information, Detwiler
Declaration at 11, ¶ 30. This figure consists of 30.21
percent for regional overhead and 10.88 percent for
corporate overhead, for a total overhead rate of 41.09
percent. Corporate overhead expenses are not included in
the calculation of regional overhead expenses. Georgia
Power's Response to Commission's Requests at 13.
169 See Georgia Power's Response to Commission's
Requests at 10-13 for an explanation as to how indirect
overhead charges were calculated and assessed.
170 Georgia Power's Supplemental Information, Detwiler
Declaration at 12, ¶ 31.
171 Knology's Reply to Georgia Power's Supplemental
Information at 13-14.
172 Georgia Power's Response to Commission's Requests
at 14.
173 Knology's Reply to Georgia Power's Supplemental
Information at 12 (quoting Detwiler Declaration at ¶¶ 11,
15).
174 Knology's Reply to Georgia Power's Supplemental
Information at 12-14.
175 Knology's Reply to Georgia Power's Supplemental
Information at 13-15.
176 Knology's Reply to Georgia Power's Supplemental
Information at 14-15.
177 Knology also states that only ``reasonable'' costs
can form the basis of a reasonable overhead charge. As an
example, Knology argues that it would be unreasonable ``if
ballpoint pens were attributed a cost of $300 a piece.''
Knology's Response to Commission's Requests at 11. The
record lacks any evidence that would allow us to rule on the
reasonableness of individual expenses that comprise a
portion of the indirect overhead rate. Regardless, we
accept Georgia Power's explanation that such costs are
scrutinized by the Georgia Public Service Commission. The
indirect overhead costs must be allocated among all parties
for whom Georgia Power is performing capital construction
projects, including Georgia Power itself. The portion of
the indirect overhead costs that are allocated to Georgia
Power are ultimately borne by Georgia Power's electric rate
payers. The Georgia Public Service Commission reviews these
costs to ensure that unreasonable costs are not charged to
electric ratepayers. Accordingly, such costs are entitled to
a presumption of reasonableness, which has not been rebutted
in this case.
178 Complaint at 26, ¶ 62.
179 Complaint at 27, ¶ 63 (citing Cable Texas, 14 FCC
Rcd at 6653-54, ¶¶ 18-19); at 28, ¶ 65; Reply at 31 (citing
Cavalier Telephone v. Virginia Elec. & Power Co., 15 FCC Rcd
9563, 9579, ¶ 42, vacated by settlement, 2002 FCC LEXIS 6385
(Dec. 3, 2002)).
180 Complaint at 28, ¶ 65.
181 Complaint at 31, ¶ 70.
182 Similarly, in Cavalier Telephone, unlike here,
there was no evidence of a long delay in challenging make-
ready procedures.
183 Complaint, Singleton Affidavit at 2-7, ¶¶ 4-9.
184 Complaint at 28, ¶ 65.
185 Complaint at 29, ¶¶ 66-68.
186 See 47 C.F.R. § 1.1403(c).
187 Complaint at 26, ¶ 62.
188 Georgia Power argues that, under the Agreement,
Knology has waived its right to assert claims against
Georgia Power. Response at 21 (citing Complaint, Exhibit 1
(Section 8.2: Time to Bring Claims)). As explained above,
however (see Section III(A)(1), supra), the Agreement does
not exclusively govern the parties' relationship, as the
Commission has independent jurisdiction to assess complaints
regarding unreasonable make-ready practices.
189 Complaint, Singleton Affidavit, Exhibit 1 (Letter
dated June 8, 2001 to Mark Mills, Georgia Power, from Wayne
Singleton, Director of Make Ready, Knology). Specifically,
Knology requested (1) field measurements and field notes
used to determine construction recommendations; (2) final
construction recommendations given to existing utilities
prior to the use of NJUNS; (3) Georgia Power construction
contractor billing records with labor and equipment usage
and costs (time sheets and/or invoices); (4) material issues
and credits with quantities, unit costs and any additional
charges (construction work orders); (5) Georgia Power
Engineering Support billing records with breakdown and/or
definition of labor, overhead and journal charges; (6)
Quality Control reports and field notes for post
construction inspections; and (7) description and
documentation of any additional make ready charges not
included within the above requested information. Id.
190 Georgia Power's Reply to Knology's Response to
Commission's Requests at 6.
191 At least one Georgia Power witness acknowledges
that the June correspondence represented a ``shift in
attitude'' and a ``sudden change of heart'' from a concern
about the speed of the project to a concern about the
reasonableness of the costs. Response, Mills Declaration at
19-20, ¶ 47. Our determination regarding the sufficiency of
the June 8 Letter is based upon the specific facts of this
case. In future cases, when an attacher argues that it is
entitled to a refund relating to make-ready practices
beginning on some date other than the date the complaint is
filed, we will closely examine any relevant correspondence
to determine whether the utility sufficiently was put on
notice regarding the existence of make-ready claims.
192 Although one Knology witness asserts that he
raised concerns about one category of Georgia Power's
charges during the weekly meetings (Casey Reply Affidavit at
3, ¶¶ 5-6), Knology offers no contemporaneous evidence of
any such complaints and Georgia Power disagrees that Knology
raised any such complaints (see generally Response at 30-
31). In any event, we conclude that an attacher must submit
its concerns about unreasonable conduct in writing to the
utility to put the utility adequately on notice that the
attacher is challenging unreasonable charges or practices.
193 Response at 32; Georgia Power's Reply to Knology's
Response to Commission's Requests at 23.
194 Georgia Power's Reply to Knology's Response to
Commission's Requests at 23 n.31 (citing Alabama Power, 311
F.3d at 1372).
195 Complaint at 21, ¶ 50.
196 Complaint at 22-23, ¶ 56.
197 Response at 26.
198 See Section III(A)(2), supra.
199 Response at 26.
200 Complaint, Exhibit 1 (Section 16.6: Payment of
Expenses).